Spouses Felix Chingkoe and Rosita Chingkoe (Petitioner) vs. Spouses Faustino Chingkoe and Gloria Chingkoe (Respondents) G.R. No. 185518April 17, 2013
Respondents are registered owners of real property. They permitted petitioners to inhabit the subject property. Through the intercession of their mother, Faustino agreed to sell his property to Felix, on condition that the title shall be delivered only after payment of the full purchase price. They agreed that the incomplete and unnotarized Deed of Sale would only be completed after full payment. On July 2001, Faustino sent a demand letter to Felix to vacate the premises. Felix refused, prompting Faustino to file a complaint for unlawful detainer with the MTC. In Felix' answer, he showed a copy of completed Deed of Absolute Sale claiming that he bought the property in cash from Faustino. He likewise filed an action for specific performance with the RTC in Faustino's refusal to surrender the title to them as buyers. The MTC dismissed the complaint of Faustino and gave weight on the Deed of Absolute Sale presented by Felix. The RTC affirmed the findings of the MTC.
The CA reversed the findings of the lower court and ruled in favor of the respondents. Issue:
Whether or not petitioners have absolute ownership of the property. Held.
No, petitioners stay was merely a tolerated possession.
The Court has ruled that although the issue in unlawful detainer is physical possession over a property, trial courts may provisionally resolve the issue of ownership for the sole purpose of determining the issue of possession. Trial courts must delve into and weigh the evidence of the parties in order to rule on the right of possession. In this case, the mere plea of title over the disputed land by Felix cannot be used as a sound basis for dismissing an action for recovery of possession. The testimony of their mother in the action for specific performance proceeding is given weight to contradict Felix' claim. That there was no payment made. And that there was no perfection of the contract. It was discovered by the CA that petitioner falsified their copy of the Deed of Sale They made it appear that that there was a valid and consummated sale when in truth and in fact there was none.
Pure San Diego-Heria
EVANGELINE RIVERA CALINGASAN AND E. RICAL ENTERPRISES vs WILFREDO RIVERA, SUBSTITUTED BY MA. LYDIA S. RLVERA, FREIDA LEAH S. RIVERA AND WIFLFREDO S. RIVERA, .JR. G.R. NO.171555April17, 2013
Spouses Wilfredo Rivera and Loreta Inciong were owners of several parcels of land located in Lipa City, Batangas. Loreto died and left Wilfredo and their two daughters, Evangeline and Brigida Luz as her surviving heirs. Eleven years later, Loreto’s heirs entered into an extrajudicial settlement of her share in the conjugal estate in favour of sisters Evangeline and Brigida. Wilfredo waived his rights on the said parcels of land but reserved his usufructuary rights and the same were annotated on the new titles that were issued. On March 13, 2013, respondent Wilfredo filed a case of forcible entry in the MTCC against petitioners and Star Honda Inc. claiming that while he was in the hospital, petioners and said company took possession of the two parcels of land that he lawfully possessed and occupied and with the aid of armed men, they barred him from entering said property. According to the petitioners and Star Honda, respondent has renounced his usufructuary rights as evidenced by two petitions that he filed in the RTC of Lipa praying for the same. MTCC dismissed Wilfredo’s complaint because it found no evidence of his prior possession and subsequent disposition of the property. Upon appeal, RTC affirmed MTCC’s ruling but it was eventually set aside upon respondent’s filing of a motion for reconsideration. Petitioners and Star Honda were ordered to pay Wilfredo P620,000 as compensation plus attorney’s fees. Petititioners and Star Honda then filed separate motions for reconsiderations and from which the RTC absolved the latter from any liability. Petitioners filed a Rule 42 petition for review with the CA which affirmed RTC’s decision noting that Evangeline’s admission that she lived elsewhere rendered her claim of possession and occupation a improbable. On Dec. 27, 2006, Wilfredo died and has been substituted my his second wife and two children. ISSUE:
Who had been in prior physical possession of the property?
SC is convinced that Wilfredo had prior possession of the property and was deprived of it through force, strategy and stealth. Ejectment cases such as forcible entry and unlawful detainer aim only to resolve who is entitled to physical possession or possession de facto and will not necessarily be decided in favour of who has presented proof of ownership. In a forcible entry case, prior physical possession is the primary consideration and can even be used as evidence against the owner himself. SC also ruled that the right to the usufruct was extinguished by Wilfredo’s death but the judgement in the ejectment case is conclusive between the parties and their successors-in-interest hence Wilfredo’s heirs are entitled for damages by way of compensation for the use and occupation of the property form the time of the RTC’s decision up to the time of Wilfredo’s death. John Dee Pastrana
LANDBANK OF THE PHILIPPINES, petitioner
BARBARA SAMPAGA POBLETE, respondent
G.R. No. 196577February 25, 2013
On October 1997, respondent Poblete obtained a loan worth P 300,000.00 from Kapantay Multi-Purpose. She mortgaged her Lot No. 29 located in Buenavista, Sablayan, Occidental Mindoro, under OCT No. P-12026. Kapantay, in turn, used OCT No. P-12026 as collateral under its Loan Account No. 97-OC-013 with Land Bank – Sablayan Branch. After a year, Poblete instructed her son-in-law Domingo Balen to look for a buyer for the Lot No. 29 in order to pay her loan and he referred Angelito Joseph Maniego. Both parties agreed that the lot shall amount to P 900,000.00 but in order to reduce taxes they will execute a P 300,000.00 agreed price appearing in the Deed of Absolute Sale dated November 9, 1998. In the Deed, Poblete specifically described herself as a “widow”. Balen, then, delivered the Deed to Maniego. Instead of paying the price, Maniego promised in an affidavit dated November 19, 1998 stating that the said amount will be deposited to her Land Bank – Savings Account but he failed to do so. On August 1999, Maniego paid Kapantay’s Loan Account for P 448,202.08 and on subsequent year he applied for a loan worth P 1,000,000.00 from Land Bank using OCT No. P-12026 as a collateral in a condition that the title must be first transferred on his name. On August 14, 2000, the Registry of Deeds issued TCT No. T-20151 in Maniego’s name pursuant to a Deed of Absolute Sale with the signatures of Mrs. Poblete and her husband date August 11, 2000 and Maniego successfully availed the Credit Line Agreement for P 1,000,000.00 and a Real Estate Mortgage over TCT No. T-20151 on August 15, 2000. On November 2002, Land Bank filed an Application for an Extra-judicial Foreclosure against the said Mortgage stating that Maniego failed to pay his loan. Poblete filed a complaint for nullification of the Deed of Sale dated August 11, 2000 and TCT No. T-20151, Reconveyance of the Title and Damages with a Prayer for Temporary Restraining Order and/or Issuance of Writ of Preliminary Injunction against Maniego, Landbank and the Register of Deeds.
The judgment of RTC, affirmed by the CA upon appeal, favors the plaintiff Poblete. Hence, this petition.
Whether or not:
1. The CA erred in upholding the finding of the trial court declaring the TCT No. T-20151 as null and void. The CA misconstrued and misappreciated the evidence and the law in not finding the title registered in the name of Maniego. 2. The CA promulgated a decision and misconstrued the evidence and the law in not finding the Land Bank a mortgagee in good faith. Held:
No to all. The petition is denied.
1. It is well-entrenched rule, as applied, by the CA, that a forged or fraudulent deed is a nullity and conveys no title. Moreover, where the deed of sale is states that the purchase price has been paid but in fact has never been, the deed is void ab initio for lack of consideration. Since the deed, is void, the title is also void. 2. Since the land title has been declared void by final judgment, the Real Estate Mortgage over it is also void. It is essential that the mortgagor be the absolute owner of the mortgage; otherwise, the mortgage is void. The doctrine “the mortgagee in good faith” as a rule does not apply to banks which are required to observe a higher standard of diligence. A bank cannot assume that, simply because the title offered as security is on its face, free of any encumbrances or lien, it is relieved of the responsibility of taking further steps to verify the title and inspect the properties to be mortgage. The records do not even show that Land Bank investigated and inspected the actual occupants. Land Bank merely mentioned Maniego’s loan application upon his presentation of OCT No. P-12026, which was still under the name of Poblete. Land Bank even ignored the fact that Kapantay previously used Poblete’s title as collateral in its loan account with Land Bank. Ace Macalalag
Star Two (SPV-AMC), Inc., Petitioners
Paper City Corporation of the Philippines, Respondent.
G.R. No. 169211March 6, 2013
From 1990-1991, Paper City applied for and was granted four (4) loans and credit accomodations by Rizal Commercial Banking Corporation (RCBC), now substituted by Star Two (SPV-AMC), Inc. The loans were secured by four (4) Deeds of Continuing Chattel Mortgages on Paper City's machineries and equipment. However, RCBC eventually executed a unilateral Cancellation of Deed of Continuing Chattel Mortgage. In 1992, RCBC, as the trustee bank, together with Metrobank and Union Bank, entered into a Mortgage Trust Indenture, which will be known hereinafter as MTI, with Paper City. In the said MTI, Paper City acquired additional loans secured by five (5) Deeds of Real Estate Mortgage, plus real and personal properties in an annex to the MTI, which covered the machineries and equipment of Paper City. The MTI was later on amended and supplemented three (3) times, wherein the loan was increased and included the same mortgages with an additional building and other improvements in the plant site. Paper City was able to comply with the loans but only until 1997 due to an economic crisis. And because of the default in the payment, RCBC filed a petition for extra-judicial foreclosure against the real estate executed by Paper City – including all the improvements. As highest bidders, the three banks were issued a Certificate of Sale. Paper City filed a complaint alleging that the sale was null and void due to lack of prior notice. During the pendency of the complaint, Paper City filed with the trial court a motion to remove machinery out of the foreclosed land and building, saying that the same were not included in the foreclosure of the real estate mortgage. The trial court denied the motion, ruling that the machineries and equipment were included. In Paper City's Motion for Reconsideration, the trial court granted the same and justified the reversal by finding that the machineries and equipment are chattels by agreement thru the four Deeds of Continuing Chattel Mortgages; and that the deed of cancellation executed by RCBC of said mortgage was not valid because it was one unilaterally. RCBC's own Motion for Reconsideration was denied. The case was elevated to the CA on appeal. RCBC alleged:
1. That Paper City gave its consent to consider the disputed machineries and equipment as real properties when they signed the MTI's and all its amendments; 2. That the machineries and equipment are the same as in the MTI's, hence treated by agreement of the parties as real properties. In its comment, Paper City argued:
1. They did not consent to consider the disputed machineries and equipment as real property; 2. That the disputed machineries and equipment remained within the purview of the existing chattel mortgages. The CA affirmed the orders of the trial court because it relied on the plain language of the MTI's. Hence, the petition. Issue:
Whether or not the subject machineries and equipment were considered real properties and should therefore be included in the extra-judicial foreclosure which in turn were sold to the banks. Held:
Yes. The SC said that repeatedly in the MTI's, the parties stipulated that the properties mortgaged by Paper City to RCBC are various parcels of land including buildings and existing improvements thereon as well as the machineries and equipment. The Court reiterated the rule that n contracts (in this case the MTI's), if the language used is clear as day and readily understandable by an ordinary reader, there is no need for construction. The case at bar is covered by the rule. The plain language and literal interpretation of the MTI's must be applied. The petitioner, other creditor banks, and Paper City intended from the very first indenture that the machineries and equipment in the annex in the MTI's are included. The Court also said that it was error for the CA to hold that the machineries and equipment in the MTI's are personal property, for in fact the MTI's did not describe the same as personal property. The lower courts ought to have noticed the fact that the chattel mortgages adverted to were dated 8 January 1990, 19 July 1990, 28 June 1991 and 28 November 1991. The real estate mortgages which specifically included the machineries and equipments were subsequent to the chattel mortgages dated 26 August 1992, 20 November 1992, 7 June 1994 and 24 January 1995. Without doubt, the real estate mortgages superseded the earlier chattel mortgages. And finally, the real estate mortgage over the machineries and equipment is even in full accord with the classification of such properties by the Civil Code as immoveable property. Thus: Art. 415. The following are immovable property:
1. Land, buildings, roads and constructions of all kinds adhered to the soil; xxxx
5. Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works. Jet Villaruel
REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH), Petitioner, vs.
HON. ROSA SAMSON-TATAD, as Presiding Judge of the Regional Trial Court, Branch 105, Quezon City, and SPOUSES WILLIAM AND REBECCA GENATO, Respondents.
G.R. No. 187677 April 17, 2013
On July 5, 2001, petitioner DPWH filed a complaint to expropriate the parcels of land of Spouse Genato affected by the construction of EDSA-QUEZON AVENUE Flyover. It was found out by the DPWH-NCR that the parcels of land of Spouses Genato was a government land and of dubious title. However the petitioner was barred from presenting evidence that the parcels of land of Spouses Genato is of dubious title. It is the contention of respondents that by allowing petitioner to present adversarial evidence, the court is in effect allowing respondents’ Torrens title to be collaterally attacked – an action prohibited by P. D. 1529. The basis of respondents is Sec. 48. of P.D 1529 which reads : SECTION 48. Certificate Not Subject to Collateral Attack. — A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law. The RTC ruled in favor of Spouses Genato. The CA affirmed the RTC’s decision. Hence, this petition. Issue:
Whether petitioner may be barred from presenting evidence to assail the validity of respondents’ Torrence title. Held:
No. SC ruled that petitioner may be allowed to present evidence to assert its ownership over the subject property, but for the sole purpose of determining who is entitled to just compensation. Here, the attempt of petitioner to present evidence cannot be characterized as an "attack." It must be emphasized that the objective of the case is to appropriate private property, and the contest on private respondents' title arose only as an incident to the issue of whom should be rightly compensated. Wherefore, petition for certiorari is granted. The decision of RTC branch 105 Quezon City is reversed. This case is REMANDED to the RTC to hear the issue of ownership for the purpose of just compensation. Red Gabriel Convocar
Optima Realty Corporation vs Hertz Phil. Exclusive Cars Inc GR No. 183035Jan 09, 2013
Optima Corporation, a company engaged in leasing commercial spaces and buildings to its tenants, entered into a Contract of Lease with Hertz Phil Exclusive Cars Inc. over an office unit and a parking slot in the Optima Building for two years and five months, starting from October 1 2003 up to February 28 2006. During the lease period, Hertz alleged that it experienced a 50% drop in monthly sales and a significant decrease in its personnel’s productivity due to the renovations made in the building. It then requested a 50% discount on its rent for four months in 2005. Optima granted the request; however, respondent still failed to pay. Petitioner then wrote another letter to Hertz on December 8 2005, reminding the latter that the contract could be renewed subject to a new negotiation and upon written notice by the lessee to the lessor at least 90 days prior to the termination of the lease period. Since no letter was received from Hertz within the 90-day period, Optima informed it that the lease would expire on February 28 2006 and would not be renewed. In its answer, Hertz wrote a letter on December 21 2005 advising Optima of the former’s desire to negotiate and extend the lease. However, petitioner no longer entertained the notice. Optima thereby ordered Hertz to surrender and vacate the leased premises. Respondent, however, refused to vacate the leased premises which resulted to Optima filing a Complaint for Unlawful Detainer and Damages with Prayer for the Issuance of a TRO and/or Preliminary Mandatory Injunction in the MeTC against Hertz. The MeTC rendered a decision in favor of Optima. The RTC affirmed its decision. CA reversed RTC’s decision because of the MeTC’s failure to acquire jurisdiction due to improper service of summons, hence, this appeal. Issue:
Whether or not the eviction of respondent was proper
Respondent failed to pay rental fees and utility bills to Optima. Records also show that the Contract of Lease expired on February 28, 2006 without any request from Hertz for a renegotiation at least 90 days prior to its expiration. One of the causes of default under a Contract of Lease is the failure to pay timely rentals and utility charges. This gives authority to the lessor to terminate the lease and to judicially eject it under the provisions of the Civil Code. The Petition for Review is granted.
JUANITA ERMITANO vs. LAILANIE M. PAGLAS
G.R. NO. 174436 January 23, 2013
On November 5, 1999, herein respondent and petitioner through her representative, Isabelo Ermitano, executed contract of lease where in petitioner leased a residential lot and a house located in Davao city. Subsequent to the execution of the lease contract, respondent received information that sometime in March 1999, petitioner mortgaged the subject property in favor of a certain Charlie Yap. The property was foreclosed with yap as the purchaser of the lot in an extra judicial foreclosure which was registered on February 22, 2000. Yap later sold the property to the respondent. It was made clear in the deed of sale that the property is still subject to petitioner’s right of redemption. Prior to respondent's purchase of the property, petitioner filed a suit for the declaration of nullity of the mortgage. Petitioner then sent a letter on May 2000 demanding the respondent to pay rent which is due and to vacate the premises. Petitioner then filed a case with the MTCC a case for unlawful detainer against respondent. The MTCC dismissed the case. It was then appealed to the RTC. The RTC held that petitioner possess the right to redeem subject property, pending expiration of the redemption period she is entitled to receive rents earnings and income derived from the property. The CA assailed the decisions of the RTC. Issue:
Who is entitled to the physical possession of the premises
Whether or not the petitioner is entitled to the rentals.
In an unlawful detainer case, the sole issue for resolution is the physical or material possession of the property involved, independent of any claim of ownership by any of the party litigants. Regarding the first issue, the CA did not erred in dismissing the unlawful detainer case. Based on the presumed validity of the mortgage and the subsequent foreclosure sale, the MTCC, the RTC and the CA also sustained the validity of respondent's purchase of the disputed property from Yap. The tenant may show that the landlord's title has expired or been conveyed to another or himself; and he is not estopped to deny a claim for rent, if he has been ousted or evicted by title paramount. In the present case, what respondent is claiming is her supposed title to the subject property which she acquired subsequent to the commencement of the landlord-tenant relation between her and petitioner. Since there is no allegation, much less evidence, that petitioner redeemed the subject property within one year from the date of registration of the certificate of sale, respondent became the owner thereof. Consolidation of title becomes a right upon the expiration of the redemption period. Having become the owner of the disputed property, respondent is then entitled to its possession. As a consequence, petitioner's ejectment suit filed against respondent was rendered moot when the period of redemption expired on February 23, 2001 without petitioner having redeemed the subject property, for upon expiration of such period petitioner lost his possessory right over the same. Hence, the only remaining right that petitioner can enforce is his right to the rentals during the time that he was still entitled to physical possession of the subject property 2. The petitioner is entitled to his right of rentals. During the period of redemption, it cannot be said that the mortgagor is no longer the owner of the foreclosed property. The right of a purchaser at a foreclosure sale is merely inchoate until after the period of redemption has expired without the right being exercised. The title to the land remains in the mortgagor until the expiration of the redemption period and conveyance of the master deed. During the period of redemption the mortgagor still being the owner of the foreclosed property is entitled not only to the possession of the disputed house and lot but also to the rents, earnings and income derived therefrom. In the instant case, there is neither evidence nor allegation that respondent, as purchaser of the disputed property, filed a petition and bond in accordance with the provisions of Section 7 of Act No. 3135. In addition, respondent defaulted in the payment of her rents. Thus, he is liable for the unpaid rents. Ayin Aplasca
NENITA QUALI'fY FOODS CORPORATION - versus -CRISOSTOMO GALABO, DELAIDA GALABO, and ZENAIUA GALABO G.R. No. 174191January 30, 2013
The respondents were the heirs of Donato Galabo. In 1948, Donato obtained Lot No. 722, Cad-102, a portion of the Arakaki Plantation in Marapangi, Toril, Davao City, owned by National Abaca and Other Fibers Corporation. Donato and the respondents assumed that Lot No. 722 included Lot No. 102. When the Board of Liquidators took over the administration of the Arakaki Plantation, it had Lot No. 722 resurveyed. The respondents, however, continue to possess, occupy and cultivate Lot No. 102. When NQFC opened its business in Marapangi, it offered to buy Lot No. 102. Donato declined and put up “Not For Sale” and “No Trespassing” signs on the property. Crisostomo fenced off the entire perimeter of Lot No. 102 and built his house on it. On August 19, 1994, the respondents received a letter from Santos Nantin demanding that they vacate Lot No. 102. Santos claimed ownership. NQFC’s workers, with armed policemen entered by force Lot No. 102 to fence it. The respondents reported the entry to the authorities. When conciliation failed, the respondents filed on September 17, 2001 a complaint for forcible entry with damages before the MTCC against NQFC. The RTC affirmed the MTCC but the CA reversed the decision hence, this appeal. Issue:
Whether NQFC had been in prior physical possession of Lot No. 102 RATIO DECIDENDI:
The MTCC and RTC had the same ruling in this case. They anchored their decision on the Deed of Absolute Sale of NQFC. However, the CA ruled that the RTC erred in its decision. The CA ruled that: (1) Donato’s failure to perfect his title over Lot No. 102 should not weigh against the respondents as the issue in a forcible entry case is one of possession de facto and not of possession de jure; and (2) NQFC’s ownership of Lot No. 102 is beside the point as ownership is beyond the purview of an ejectment case. The title or right of possession, it stressed, is never an issue in a forcible entry suit. The SC ruled that NQFC had no prior physical possession. To prove prior physical possession of Lot No. 102, NQFC presented the Deed of Transfer, Santos’ OCT P-4035, the Deed of Absolute Sale, and the Order of the Bureau of Lands approving Santos’ free patent application. In presenting these pieces of evidence, NQFC is apparently mistaken as it may have equated possession that is at issue as an attribute of ownership to actual possession. The SC agreed that ownership carries the right of possession, but the possession contemplated by the concept of ownership is not exactly the same As the possession in issue in a forcible entry case, the court held that the respondents instead of addressing the issue of possession and presenting evidence showing that NQFC or Santos had been in actual possession of Lot No. 102. The court also based its ruling in Section 1, Rule 70 of the Rules of Court. It provides for a forcible entry suit to prosper, the plaintiff must allege and prove: (1) prior physical possession of the property; and (2) unlawful deprivation of it by the defendant through force, intimidation, strategy, threat or stealth. The court also allowed Section 16, Rule 70 of the Rules of Court. But this is only an exception and is allowed only in this limited instance. DECISION:
The court denied the petition and the resolution of CA is affirmed. Krissey Osorio
Mercy Vda. De Roxas, represented by Arlene C. Roxas-Cruz,
in her capacity as substitute appellant-petitioner,
Our Lady’s Foundation, Inc.,
G.R. No. 182378March 06, 2013
On 1 September 1988, Salue Dealca Latosa filed before the Regional Trial Court a complaint for the recovery of ownership of a portion of her residential land located at Our Lady’s Foundation Village Bibincahan, Sorsogon. According to her, Atty. Henry Amado Roxas, represented by herein petitioner, encroached on a quarter of her property by arbitrarily extending his concrete fence beyond the correct limits. In his answer, Roxas imputed the blame to respondent Our Lady’s Village Foundation Inc., the former then filed a Third-Party complaint against respondent and claimed that he only occupied the adjoining portion in order to get the equivalent area of what he had lost when the respondent foundation trimmed his property for the subdivision road. The RTC admitted the Third-Party complaint and proceeded to trial based on merits. The RTC held based on evidence that Roxas occupied a total of 112 sq.m of Latosa’s lots, and that respondent foundation trimmed the former’s property by 92 sq.m. The court rendered judgment on the first complaint ordering the defendant foundation to surrender and return the portion of the 116 sq.m which belonged to the plaintiff, Latosa. The court also ordered respondent Roxas to demolish whatever structure constructed thereon at his own expense. With regards to the third-party complaint, the court ordered the third-party defendant foundation reimburse the third-party plaintiff Roxas the value of 92 sq.m which belonged to the latter, plus legal interest to be reckoned from the time it was paid to the third-party defendant. Roxas appealed to the CA, which denied the appeal. The decision being final, the RTC issued a Writ of Execution to implement the ruling ordering the third-party respondent to reimburse Roxas for the value of the property. The trial court approved the Sheriff’s Bill which valued the property at 2,500 pesos per sq m. Opposing to the valuation of the property, the defendant foundation filed a motion to quash the bill and a motion Inhibition of the RTC judge and contending that it should only pay Roxas at a rate of 40.00 pesos per sq.m at the same rate that Roxas paid when the latter purchased the property. The trial court approved an Amended Sheriff’s Bill which reduced the valuation to 1,800 per sq.m. The RTC denied both motions and cited fairness to justify the computations of respondent’s judgment obligation. Notices of garnishment were issued by the sheriff to Bishop Robert Arcilla-Maullon, the foundation’s general-manager. The foundation, refusing to pay the said amount per sq.m filed a Rule 65 Petition before the CA. The CA, reversed the decision of the RTC ordering the respondent foundation to reimburse the petitioner at the rate of 40.00 pesos per sq.m. Issues:
1. The determination of the correct amount to be reimbursed by the respondent foundation to Roxas. 2. Whether or not Arcilla-Maullon should be personally held liable for the obligation of the respondent foundation. Held:
To settle the contention by the respondent foundation, the court resorts to the provisions of the Civil Code, specifically Article 450 referring to encroachments in bad faith, the owner of the land encroached upon petitioner herein- has the option to require respondent builder to pay the price of land. Although this provision does not explicitly state the reckoning period for valuation of property, the court by citing the case of Tuatis vs. Spuses Escol which illustrates that the present and current fair value of the land is to be reckoned at the time that the land owner elected the choice, not at the time that the property was purchased. The RTC properly considered in its 2 December 2004 Order the value of the lot at P1,800 per square meter, the current fair price as determined in the Amended Sheriff’s Bill. As to the second issue, the court holds that since respondent foundation’s manager was not a party to the case, the CA correctly ruled that Arcilla-Maullon cannot be held personally liable for the obligation of the foundation. A corporation is a juridical entity with a legal personality separate and distinct from those acting for and on its behalf and, in general, of the people comprising it. The respondent foundation was ordered to pay Roxas 1,800 pesos per sq.m as determined by the decision of the RTC. Nica Napulan
Holy Trinity Development Corporation (HTRDC)
Spouses Carlos and Elizabeth Abacan
GR No. 183858April 17, 2013
Petitioner HTRDC acquired a parcel of land from Freddie Santiago. It was later on discovered that the said property was already occupied by some individuals; among them the respondent spouses. HTRDC then commenced a complaint with the DARAB for cancellation of the emancipation patents against some of the occupants. The provincial adjudicator ordered the cancellation of the said patents and the DARAB affirmed the decision. When the need for the property arose, HTRDC made both verbal and written demands on the occupants to vacate the property – but to no avail. Thus, HTRDC resorted to the filing of an unlawful detainer case against them. The MTCC ruled in favor of HTRDC and then ordered the issuance of an Alias Writ of Execution and an Alias Special Order of Demolition. Respondents moved to quash both writs on the ground that Emancipation Patents have been issued in their favor during the pendency of the case. The MTCC denied their motion. On appeal, the CA rules in favor of the respondents and thereby issued a Writ of Preliminary Injunction and granted the prayer for a Temporary Restraining Order. Hence, the instant petition for review by HTRDC.
W/N the subsequent acquisition of ownership is a supervening event that will bar the execution of judgment in an unlawful detainer case Held:
NO. It is well-settled that the sole issue of ejectment cases is physical or material possession of the subject property independent of any claim of ownership by the parties. The argument of respondent spouses that they subsequently acquired ownership of the property cannot be considered as a supervening even that will bar the execution of the questioned judgment, as unlawful detainer does not deal with the issue of ownership. Mary Grace Denosta
Rey Castigador Catedrilla, Petitioner,
Mario and Margie Lauron, Respondents
G.R. No. 179011 April 15, 2013
On February 12, 2003, petitioner Rey Castigador Catedrilla filed with the Municipal Trial Court (MTC) of Lambunao, Iloilo a Complaint for ejectment against the spouses Mario and Margie Lauron on the subject lot owned by Lilia, the petitioner's mother. Sometime in 1980, respondents Mario and Margie Lauron, through the tolerance of the heirs of Lilia, constructed a residential building of strong materials on the northwest portion of the lot covering an area of one hundred square meters; that the heirs of Lilia made various demands for respondents to vacate the premises and even exerted earnest efforts to compromise with them but the same was unavailing and the petitioner reiterated the demand on respondents to vacate the subject lot on January 15, 2003, but respondents continued to unlawfully withhold such possession. In their Answer, respondents claimed that petitioner had no cause of action against them, since they are not the owners of the residential building standing on petitioner's lot, but Mildred Kascher (Mildred), sister of respondent Margie, as shown by the tax declaration in Mildred's name. On November 14, 2003, the MTC rendered its Decision in favor of the plaintiff. Based on the allegations and evidence presented, it appeared that petitioner is one of the heirs of Lilia Castigador Catedrilla, the owner of the subject lot and that respondents are occupying the subject lot; that petitioner is a party who may bring the suit in accordance with Article 487 of the Civil Code; and as a co-owner, petitioner is allowed to bring this action for ejectment under Section 1, Rule 70 of the Rules of Court; that respondents are also the proper party to be sued as they are the occupants of the subject lot which they do not own. Respondents filed their appeal with the Regional Trial Court (RTC) of Iloilo City and on March 22, 2005, the RTC rendered its Order and affirmed the decision of MTC. Dissatisfied with the decision, respondents filed with the Court of Appeals (CA) a petition for review. On February 28, 2007, the CA issued its decision reversing and setting aside the decision of the RTC. The CA found that only petitioner filed the case for ejectment against respondents and ruled that the other heirs should have been impleaded as plaintiffs citing Section 1, Rule 7 and Section 7, Rule 3 of the Rules of Court; that the presence of all indispensable parties is a condition sine qua non for the exercise of judicial power; that when an indispensable party is not before the court, the action should be dismissed as without the presence of all the other heirs as plaintiffs, the trial court could not validly render judgment and grant relief in favor of the respondents. Hence, this petition for review on certiorari.
Whether or not respondents spouses are the occupants of the subject lot being contested Held:
According to Article 487 of the New Civil Code, any one of the co-owners may bring an action in ejectment. Quoting the explanation of Professor Arturo M. Tolentino, “A co-owner may bring an action in ejectment without the necessity of joining all the other co-owners as co-plaintiffs, because the suit is deemed to be instituted for the benefit of all. If the action is for the benefit of the plaintiff alone, such that he claims possession for himself and not for the co-ownership, the action will not prosper”. In this case, although petitioner alone filed the complaint for unlawful detainer, he stated in the complaint that he is one of the heirs of the late Lilia Castigador, his mother, who inherited the subject lot, from her parents. Petitioner did not claim exclusive ownership of the subject lot, but he filed the complaint for the purpose of recovering its possession which would redound to the benefit of the co-owners. Since petitioner recognized the existence of a co- ownership, he, as a co-owner, can bring the action without the necessity of joining all the other co-owners as co-plaintiffs. In ejectment cases, the only issue to be resolved is who is entitled to the physical or material possession of the property involved, independent of any claim of ownership set forth by any of the party-litigants. In an action for unlawful detainer, the real party-in-interest as party-defendant is the person who is in possession of the property without the benefit of any contract of lease and only upon the tolerance and generosity of its owner. Well settled is the rule that a person who occupies the land of another at the latter’s tolerance or permission, without any contract between them, is bound by an implied promise that he will vacate the same upon demand, failing which a summary action for ejectment is the proper remedy against him. His status is analogous to that of a lessee or tenant whose term of lease has expired but whose occupancy continued by tolerance of the owner. Here, records show that the subject lot is owned by petitioner's mother, and petitioner, being an heir and a co-owner, is entitled to the possession of the subject lot. On the other hand, respondent spouses are the occupants of the subject lot which they do not own. Respondents' possession of the subject lot was without any contract of lease as they failed to present any, thus lending credence to petitioner's claim that their stay in the subject lot is by mere tolerance of petitioner and his predecessors. It is indeed respondents spouses who are the real parties-in-interest who were correctly impleaded as defendants in the unlawful detainer case filed by petitioner. Wherefore, the decision of the CA was reversed and set aside, and reinstated the decision of the RTC of Iloilo City. Joebert Peregrino
Manila Electric Company, petitioner
Heirs of Dionisio Deloy and Praxedes Martonito-Deloy represented by Policarpio Deloy, respondents G.R. No. 192893June 5, 2013
On November 12, 1965, Dionisio donated a 680 sq.m. portion (subject land) of the 8,550 sq.m. property to the Communication and Electricity Development Authority (CEDA) for the latter to provide cheap and affordable electric supply to the province of Cavite with the agreement that a member of the Deloy family be employed with CEDA. Sometime in 1985, CEDA offered to Manila Electric Company (MERALCO) its electric distribution system, consisting of transformers and accessories, poles and hardware, wires, service drops and customer meters and all rights and privileges therein. This was embodied in a MOA on June 28, 1985 and the Deed of Absolute Sale was executed by CEDA and MERALCO upon approval of the MOA on the same date. Thereafter, MERALCO occupied the subject land. On October 11, 1985, MERALCO, through its Assistant Vice President and Head of the Legal Department, Atty. L.D. Torres wrote a letter to Dionisio requesting permission for the continued use of the subject land as a substation site. The parties however, were not able to reach any agreement until Dionisio died on December 5, 1985, as it was stated in the internal memorandum from L.G. De La Paz, a substation staff to Atty. G.R. Gonzales and Atty. Torres of the Realty Division of MERALCO. After the wake of Dionisio, his heirs represented by Policarpio allowed MERALCO continue use of the subject land until November 22, 2001 when the heirs finally terminated the judicial proceedings of the reconstituted title of the Trece Martires property. Then, the Respondents-heirs of Dionisio offered to sell the subject land to MERALCO but their offer was rejected because according to MERALCO, when Dionisio executed the Deed of Donation to CEDA he lawfully sold to it all rights necessary for the operation of the electric service in Cavite thus, as a successor-in-interest, it had legal justification to occupy the subject land. The respondents sent a demand letter on May 19, 2003 to MERALCO to vacate the land; the latter however, objected. Thus, the former were constrained to file the complaint for Unlawful Detainer on July 8, 2003. The MTCC-Branch 23, Trece Martires rendered the Decision dismissing respondent’s complaint against MERALCO. It ruled that it had no jurisdiction over the case because it would require an interpretation of the Deed of Donation. Nevertheless, it opined that MERALCO was entitled to the possession of the subject land. Aggrieved, the respondents appealed to the RTC-Cavite. The RTC sustained the MTCC decision on May 4, 2006. In its Resolution, the RTC-Cavite pointed out that the only issue in unlawful detainer case was possession and the interpretation of the deed of sale and the deed of donation was the main, not merely incidental issue. Respondent’s motion for reconsideration was denied by the RTC in its September 27, 2006 Order; Not satisfied with the adverse ruling, respondents elevated the case before the Court of Appeals via petition for review under Rule 42 of the Rules of Court. In its November 9, 2001 Decision, the CA set aside the RTC Ruling. In partially granting the appeal, the CA explained that an ejectment case based on the allegation of possession by tolerance would fall under the category of unlawful detainer. As to the issue of possession, the CA stated that Dionisio has superior rights over the land as evidenced by the letter of Atty. Torres and an internal memorandum of L.G. De La Paz of Trece Martires substation. Pursuant to Section 26, Rule 130 of the Rules of Evidence, the admissions and/or declarations may be admitted against MERALCO. MERALCO moved for reconsideration but its motion was denied by the CA in its July 5, 2010 Resolution. Issues:
1. Whether an action for Unlawful Detainer is the proper remedy in this case; 2. Who has a better right of physical possession of the disputed property. Held:
Petition is denied.
1. Yes. The possession of the defendant in Unlawful Detainer is originally legal but became illegal due to the expiration or termination of the right to possess. When the issue of ownership is raised in an ejectment case, based on the allegation of possession by tolerance, it falls under the category of Unlawful Detainer. Where the plaintiff allows the defendant to use his/her property by tolerance without any contract, the defendant is necessarily bound by an implied promise that he/she will vacate on demand, failing which, an action for Unlawful Detainer will lie. MERALCO contends that respondents’ complaint failed to make out a case for unlawful detainer but, rather, one incapable of pecuniary estimation, properly cognizable by the RTC and not the MTCC. It stresses the allegations in the complaint involve a prior determination on the issue of ownership before the issue of possession can be validly resolved. However, Section 16, Rule 70 of the Rules of Court allows the first level courts, in ejectment cases, to provisionally determine the issue of ownership for the sole purpose of resolving the issue of physical possession. 2. The Deloys has a better right. On the issue of possession, the CA opined that by seeking Dionisio’s permission to occupy the subject land, MERALCO expressly acknowledged his paramount right of possession. Evidently, by the two documents (the letter request, dated and the Internal Memorandum), MERALCO acknowledged that the owners of the subject land were the Deloys. The first letter was written barely four (4) months after the deed of sale was accomplished. As observed by the CA, MERALCO never disputed the declarations contained in these letters which were even marked as its own exhibits. It is fundamental that a certificate of title serves as an evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. It bears to emphasize that the titleholder is entitled to all attributes of ownership of the property, including possession. Thus, the court must uphold the age-old rule that the person who has Torrens title over the land is entitled to its possession. Also, the Court has read the MOA and the Deed of Absolute Sale but found nothing that clearly stated that the subject land was included therein. What were sold, transferred and conveyed were "its electric distribution facilities, service drops, and customers' electric meters except those owned by the VENDOR'S customers, x x x, and all the rights and privileges necessary for the operation of the electric service JC Bangoy
Jose Casilang vs. Rosario Casilang Dizon
GR No. 180269February 20, 2013
Liboro and Francisca Casilang died in 1982, leaving 3 parcels of land to their 8 children (Ireneo one of the sons). The lot in question is Lot No. 4618 containing 847 sq. m. Rosario, daughter of Ireneo, filed with MTC an ejectment against her uncle, Jose, for unlawful detainer of said lot. Rosario presented the MTC a tax declaration filed in 1994 in the name of her father, Ireneo. During the pre-trial procedure, Jose and his lawyer did not appear and was declared in default. The MTC gave a favorable judgment to Rosario based upon her evidence. Jose appealed to the RTC to defend his claim by presenting the surviving siblings to testify their father intended, through verbal partition, the said lot where his home was built and his sibling also testified that Jose took care of their ailing parents in his house and Ireneo was given a larger lot in a different area. Rosario claimed the lost was given to her father, Ireneo, as proven by the tax declaration and Ireneo allowed Jose to live on the lot out of benevolence and tolerance. During the trial, a neighbor also testified Ireneo never lived on the said lot, but was a tenant farmer in another area. The RTC ruled in favor of Jose stating Rosario's claim was baseless. Rosario appealed to the Court of Appeals. The CA reversed the RTC decision using evidence from the original ruling of the MTC and the documents presented by Rosario. Issue:
1. WON the CA erred in using the evidence used by the MTC.
2. WON the verbal partition is valid.
3. WON tax declarations are conclusive evidence of ownership Held:
1. Yes. The Supreme Court reversed the CA decision and reinstated the RTC decision because the RTC conducted a full blown case as opposed to the MTC. The SC has the authority to review the facts of the case if there is glaring discrepancies between the trial court and the CA as provided by Rule 45 of the RRC. Inferior courts are empowered to rule on the question of ownership raised by the defendant in an ejectment suit, but only to resolve the issue of possession; its determination is not conclusive on the issue of ownership. 2. Yes. The SC also upheld the verbal partition because it was coupled with actual possession of the lot by Jose and cited that according to Article 433 of the NCC, Jose had disputable presumption of ownership and Article 541 also states Jose need not to prove ownership, Rosario must show convincing evidence. The tax declaration was insufficient as it is a mere indicia of ownership and said tax declaration was filed two years after the death of Ireneo in 1992. An agreement of partition may be made orally or in writing. An oral agreement for the partition of the property owned in common is valid and enforceable upon the parties. It has been held or stated in a number of cases involving an oral partition under which the parties went into possession, exercised acts of ownership, or otherwise partly performed the partition agreement, that equity will confirm such partition and in a proper case decree title in accordance with the possession in severalty. 3. No. In the absence of actual, public and adverse possession, the declaration of the land for tax purposes does not prove ownership. There is no proof that Liborio, or the Casilang siblings conveyed Lot No. 4618 to Ireneo. Irish Mombay
Land Bank of the Philippines vs Eduardo M. Cacayuran
GR No. 191667 April 17,2013
The municipality Sanguniang Bayan passed a resolution to implement a multi phased plan to develop Agoo Public Plaza. They passed a resolution authorizing Mayor Enriguel to obtain a loan from Land Bank and incidental thereto, mortgage a 2,353.75 sq. meter lot which is a portion of its plaza as a collateral, it further authorized the assignment of a portion of its Internal Revenue Allotment and the monthly income from the project as additional security. Land Band then extended a 4M loan in favor of the municipality. 10 kiosks were completely constructed and rented out. They passed another resolution to build a commercial center on the Plaza lot and contracted another loan posting the same securities as that of the first loan to Land Bank. 28M was granted in favor of the municipality as their 2nd loan. Respondent Cacayuran invoking his right as a taxpayer, filed a complaint against the implicated officers and Land Bank, questioning the validity of the subject loans on the ground that the Plaza lot used as a collateral of the loans is a property of public dominion and therefore, beyond the commerce of men. Land Bank claimed that Cacayuran did not have a cause of action and that it is not privy to the implicated Officers acts of destroying the Agoo Plaza. Pending the proceedings, construction of the commercial center finally completed and made known as Agoo’s People Center (APC).The SB passed another ordinance declaring APC as patrimonial property. RTC ruled in favor of Cacayuran, declaring the nullity of the subject loan. And that the resolution passed approving the said loan was in a highly irregular manner and thus Ultra Vires. It further added that the Plaza lot is proscribed from collateralization since it is a property for public use. Only Landbank appealed yet CA affirmed with modification the RTC’s rulling, excluding Vice Mayor Eslao from the liability. It also held that Cacayuran has Locus Standi to file his complaint and that the resolution is invalid and that the Plaza is a property of public dominion and so it cannot be appropriated by the state or private person. CA further added that subject loans are ultra vires (beyond one’s legal power or authority), they are transacted without proper authority and their collateralization constituted improper disbursement of public funds. Hence, Land Bank file this instant petition. Issues:
1. Whether Cacayuran has standing to sue,
2. Whether the subject Resolutions were validly passed
3. Whether the subject loans are Ultra Vires
1. Yes. A tax payer is allowed to sue where there is a claim that public funds are illegally disbursed, or that public money is being deflected to any improper purpose, or that there is wastage of public funds through the enforcement of an invalid or unconstitutional law.2 requisites must (a)public funds derived from taxation are disbursed by a political subdivision or instrumentality and in doing so, a law is violated or some irregularly is committed. (b) the petitioner is directly affected by the alleged act. As in this case the requisites are present Cacayuran as a resident –tax payer has Lucos Standi to sue. 2. No. In the question of the validity of resolution, it was deemed to be tainted with irregularities such as the SB’s failure to submit Resolutions to the Sanguniang Panlalawigan and the lack of publication and posting in contravention of Sec.59 of the LGC. Land Bank cannot rely on the Subject resolutions as basis to validate the loan because the authorization to contract the loan by the Mayor and the Redevelopement Plan itself were not approved pursuant to any law or ordinance but through mere resolution. 3. Yes. Town Plazas are properties of public dominion, to be devoted to public use and to be made available to public general. They are outside the commerce of man and cannot be disposed of or leased by municipality to private person. Art.1409 of the Civil Code also applies in this case. The unlawful purpose behind the subject loans which is to fund the commercialization of the Agoo Plaza pursuant to the Redevelopment Plan, they are considered as Ultra Vires in the primary sense thus, rendering them void and in effect, nonbinding on the municipality. Absent any express grant by the national government, the Municipality has no right to claim and convert the land on which the Agoo Plaxza is situated into patrimonial property. Petition denied CA decision affirmed.
Joe Abad Lazaro Jr.
City of Cebu vs. Apolonio M. Dedamo Jr.
GR No. 172852January 30, 2013
This is a petition for review on certiorari seeking to annul and set aside the decision of the Court of Appeals ordering petitioner City of Cebu to pay 12% legal interest per annum on the unpaid balance of the just compensation to respondent Apolonio Dedamo Jr. The case is an offshoot of a civil case for eminent domain over two parcels of land owned by Spouses Apolonio and Blasa Dedamo filed by the petitioner. Petitioner immediately took possession of the land after completion of the requirements. Compromise agreement regarding provisional payment was made between petitioner and the spouses and later the court approved the amount intended for just compensation as affirmed by CA and elevated for review docketed as GR # 142971. Spouses Dedamo passed away and they were substituted by respondent Apolonio Dedamo Jr. Petitioner paid respondent with the just compensation less provisional payment. However, respondent filed a Manifestation and Motion before RTC to order petitioner to pay interest on the just compensation. RTC denied the motion and contended that it can no longer amend a final and executory judgment that did not specifically direct the payment of legal interest. Respondent sought recourse before CA asserting the petitioner to pay a) 12% interest from the actual taking of the property up to the date of the payment, b) 12% interest from the time awarding the just compensation became final until satisfaction. CA rejected the respondent’s first claim since the issue was belatedly raised during the execution stage and after the judgment of just compensation attained finality. CA found respondent’s second contention meritorious and at the same time denied petitioner’s motion for reconsideration. It awarded legal interest accruing from the time RTC order dated December 27, 1996, awarding just compensation was affirmed with finality by the Supreme Court up to the time of full payment thereof. Both parties elevated CA judgment to the Supreme Court. Respondent’s petition was docketed as GR # 172942. In case at bar, petitioner prayed for the annulment of the award of 12% legal interest made by the CA in view of the termination of eminent domain case upon payment of the just compensation in satisfaction of the writ of execution. Respondent also claimed that the award of just compensation must be reckoned from the date of taking of subject lots and not from the date of the finality of just compensation. Issues:
1. Should 12% legal interest granted by the CA be annulled in view of the termination of eminent domain case upon payment of the just compensation in the satisfaction of writ of execution? (raised by petitioner) 2. Should the amount of just compensation be reckoned from the date of taking of the subject lots and not from the date of finality of decision of just compensation before it is paid, constituting loan or forbearance of money that entails the imposition of a 12% interest per annum? (raised by respondent) Held:
The petition is denied on the ground of res judicata in the mode of conclusiveness of judgment. The petitioner broaches the issues similarly raised and already resolved in G.R. No. 172942. Under the principle of conclusiveness of judgment, when a right or fact has been judicially tried and determined by a court of competent jurisdiction, or when an opportunity for such trial has been given, the judgment of the court, as long as it remains unreversed, should be conclusive upon the parties and those in privity with them. Stated differently, conclusiveness of judgment bars the re-litigation in a second case of a fact or question already settled in a previous case. The adjudication in G.R. No. 172942 has become binding and conclusive on the petitioner who can no longer question the respondent’s entitlement to the 12% legal interest awarded by the CA. The Court’s determination in G.R. No. 172942 on the reckoning point of the 12% legal interest is likewise binding on the petitioner who cannot re-litigate the said matter anew through the present recourse. RV Lebrilla
Green Acres Holdings vs. Victoria P. Cabral
Victoria P. Cabral vs. Green Acres holdings
G.R. Nos. 175542 & 1832055 June 2013
Green Acres Holdings and Victoria Cabral are of both petitioners and respondents of each other. Facts:
The properties in question were three lots of land covered by PD 27 and given to spouses Moraga as Emancipation Patents to the detriment of the original owner, Victoria Cabral. Cabral insisted that these patents were obtained through fraud since not only were the lands in question not ideal for rice and corn; they had also already been designated as non-agricultural. Cabral doggedly pursued the return of her lands, filed complaints against the Provincial Agrarian Reform Adjudicator’s decision, brought an appeal to the Department of Agrarian Reform Adjudication Board, and essentially fought tooth and nail for her properties, expending what remedies and resources she had access to, and being quite creative about it by the way. Unfortunately, none of the titles in question carried any of the defects and encumbrances that would ordinarily repel any interested third parties other than a cancelled real estate mortgage in favor of PCI Bank. Filcon was one such interested party. They managed to purchase the said lots of land from the spouses Moraga while Cabral’s appeal was still stuck in litigation hell. Surprisingly, they were even able to secure a 12 million peso loan from PCI Bank with such three lots of land as collateral. Said collateral legitimized Filcon’s acquisition and it didn’t take for it to attract Green Acres into a picture like a tourist passing through Calle Real throwing money at anything that caught its eye. In summary, so far, the Moraga titles were cancelled, ditto the Filcon titles thereafter and Green Acres were now the new and proud owners of said lands, promptly building warehouses on them Unfortunately, DARAB disagreed with PARAD’s call on the matter and threw a wrench into the whole happily ever after situation Green Acres thought it had with its new acquisitions. Having heard of said threats to their interests, they promptly told Filcon that they knew about that nasty business with the Agrarian Reform busybodies concerning their newly acquired lands and they weren’t keen on the matter. Filcon insisted that it was just as much an innocent buyer as Green Acres was and Green Acres replied that they better pray to God they very well were innocent purchasers or else their warranties under the deed of sale wouldn’t be such an innocent piece of paper anymore. Filcon was quick to assure Green Acres that it was doing everything it can to protect its customer’s interests. Not to be left twiddling its thumbs in the corner, though, Green Acres took the initiative to quiet its title alleging the following: 1. That it purchased said lands in good faith;
2. That it was not a party to the DARAB proceedings; and 3. That DARAB essentially cast a cloud over their titles. Cabral, of course, denied all of their material allegations and insisted on the following: 1. That Green Acres never acquired a valid title;
2. That it could not possibly claim to be an innocent purchaser; and 3. That quieting the title would effectively subject the DARAB decision to review. She was so confident in her own arguments that she filed a Demurrer and expounded on her earlier arguments in that: 1. Green Acres failed to prove a purchase in good faith and for value; 2. The complaint was inappropriate since it questioned the proceedings held at DARAB rather than assailing her titles over the subject property; and 3. The trial court had no jurisdiction over the matter since it was still an Agrarian Reform question at the time and therefore still exclusively under the purview of the DARAB. Trial court granted said Demurrer and dismissed the case. Green Acres had no other recourse left but too file an appeal with the CA. In the meantime, the DARAB decision became executory and Cabral wasted no time in filing a Motion for Issuance of Writ of Execution. It was promptly denied. The problem was that Cabral pushed too far. Her demands exceeded the scope of the writ and in doing so the PARAD had to deny her motion. The decision by DARAB was limited to the parties involved in the contest over the lands at the time when the controversy was submitted for resolution. Green Acres was not a party to any of it when it was submitted for resolution. It would have been a grave miscarriage of justice had the quasi-judicial bodies executed a decision to the detriment of a party that was never included in any of the proceedings; denying the party its day in court. The title issued to the spouses Moraga and Filcon were as good as cancelled, yes, but it was unacceptable for the PARAD to include Green Acres as well. As all roads lead to Rome, this one ultimately lead to the Supreme Court as the tit-for-tat conflict between Cabral and Green Acres was basically boiled down to the following Issues:
1. Whether the DARAB decision should be enforced against Green Acres; and 2. Whether the DARAB decision constituted a cloud over the subject properties. Held:
1. As to whether the DARAB decision should be enforced against the Green Acres; NO it should not: the court found favor in Green Acres. a. Green Acres was not made a party to the DARAB proceeding: “The principle that a person cannot be prejudiced by a ruling rendered in an action or proceeding in which he was not made a party conforms to the constitutional guarantee of due process of law.” b. Cabral’s attack was clearly a collateral attack, one the court would not allow. c. Only DARABs decision could be executed, nowhere in that decision was Green Acres included; to permit Cabral’s motion would mean to modify the DARAB’s decision. Cancelled titles of Moraga and Filcon do not automatically cancel Green Acres’ titles as well. d. Green Acres is an innocent purchaser; properties were acquired without defects or encumbrances. They were under no obligation, at all, to investigate the titles acquired from Filcon any further. It was Cabral’s failure that she failed to annotate a notice of lis pendens on the titles of spouses Moraga and Filcon. 2. As to whether the DARAB decision in favor of Cabral constituted a cloud on Green Acres’ title over subject properties; YES, they do are. Green Acres’ arguments are meritorious. Two indispensable requisites must concur for an action to quiet a title to prosper: (1) the plaintiff or complainant has a legal or equitable title or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting a cloud on his title must be shown to be in face invalid or inoperative despite its prima facie appearance of validity or legal efficacy. a. There is no dispute that Green Acres has legal title over the subject properties. b. There are four elements of a cloud on title, the court holds that the DARAB decision satisfies them all: i. DARAB’s decision is both an “instrument” and a “record”. ii. DARAB’s decision is apparently valid and effective. iii. DARAB’s decision is not effective nor enforceable against Green Acres since Green Acres is not a party to its decision. iv. DARAB’s decision is obviously prejudicial to the title sought to be quieted.
RURAL BANK OF STA. BARBARA (Iloilo) INC., petitioner
GERRY CENTENO, respondent
G.R. No. 200667 March 11, 2013
When Gregorio and Rosario Centeno failed to pay their loan with the petitioner, the mortgaged property was foreclosed and auctioned. The petitioner as highest bidder purchased the property and registered the Certificate of Sale at Public Auction with the ROD in 1971. The lots were not redeemed within the required one (1) year period after the auction sale was registered. The Centenos continued cultivating the lands. Gerry, their son and respondent in this case, took over and in 1986 purchased the lots from his parents. Tax declarations were issued in his name. In 1997, petitioner bank obtained a Final Deed of Sale and tax declarations also in its name. It filed a petition for the issuance of a Writ of Possession with the RTC on March 1998 for entitlement to the lots. The respondent opposed the petition asserting that:
1. He purchased the lots and has been in actual, open and exlusive possession of them for at least fifteen (15) years; 2. The mortgage and foreclosure are null and void, because the signatures on the documents were forged; and 3. The petitioner’s claim on the subject lots already prescribed The RTC ruled that the petitioner is the lawful owner of the subject lots; its rights over the property became absolute upon the failure of the respondent to redeem the property. The issuance of a writ of possession by the court is only ministerial. The Court of Appeals reversed the decision of the RTC. It considered the respondent as a “third party who is holding the property adversely to the judgment of the obligor, and has such rights to vindicate his claims in proper judicial proceeding”. Issue:
WON the petitioner is entitled to the Writ of Possession.
The petition is meritorious. After consolidation of the title in the purchaser’s name for failure of the mortgagor to redeem the property, the purchaser’s right ripens into an absolute right of a confirmed owner. At that point, the issuance of a writ of possession upon proper action and proof is ministerial to the court.